US Department of Labor recovers $168K in back wages for 51 storm recovery workers misclassified as independent contractors, denied overtime

Read this news release En Español. 

WILMINGTON, NC – The U.S. Department of Labor has recovered $168,796 in back wages for 51 workers at a Wilmington storm response contractor that misclassified them as independent contractors and failed to pay them for several months after work was completed.

The department’s Wage and Hour Division found Utility Resource Services LLC, which employs former utility workers and drivers to identify and report line and power issues in areas affected by hurricanes, violated minimum wage and overtime violations of the Fair Labor Standards Act when it failed to pay many of the affected workers for more than seven months. 

Investigators also learned the employer had misclassified some employees as independent contractors and did not pay them required time-and-one-half rates for hours over 40 in a workweek and failed to maintain payroll records for its employees, as the law requires. 

“Federal law requires employers to comply with all federal employee protections, including proper classification and payment of all legally earned wages,” explained Wage and Hour Division District Director Richard Blaylock in Raleigh, North Carolina. “Our staff routinely provides assistance and training to help employers understand and follow the law and avoid the costly consequences of violations.” 

During the investigation, the employer reported they could not make payroll after another company holding the contract for those services failed to pay them. 

“The law does not allow employers to pass along their financial hardships to their employees. A customer’s failure to pay an employer for services does not affect their obligation to pay its employees’ lawfully earned wages on their regular pay dates,” added Blaylock. 

Currently, the Wage and Hour Division is holding more than $2.5 million in wages recovered from employers owed to more than 3,200 North Carolina workers. People who believe they may be owed back wages collected by the division should use its Workers Owed Wages search tool to determine if they are owed back wages.

Workers and employers can call the division confidentially with questions, and the department can speak with callers in more than 200 languages. For more information about the FLSA and other laws enforced by the agency, contact the division’s toll-free helpline at 866-4US-WAGE (487-9243). The division also offers online resources for employers, such as a fact sheet on Fair Labor Standards Act overtime requirements.

Workers and employers alike can help ensure hours worked and pay are accurate by downloading the department’s Android or iOS Timesheet App for free in English and Spanish.